Iowa Nat. Mut. Ins. Co. v. Fidelity & Cas. Co. of New York
| Decision Date | 09 June 1964 |
| Docket Number | No. 51309,51309 |
| Citation | 256 Iowa 723,128 N.W.2d 891 |
| Parties | IOWA NATIONAL MUTUAL INSURANCE COMPANY, Appellant, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK, Appellee. |
| Court | Iowa Supreme Court |
Beecher, Buckmaster, Beecher & Lindeman, Waterloo, for appellant.
Bannister, Carpenter, Ahlers & Cooney, Des Moines, for appellee.
We are presented here with a controversy between two insurance companies. The action was brought by Iowa National Mutual Insurance Company which on May 27, 1957, had issued a policy to Russell Ward covering bodily injury, property damage, and other risks, which specifically referred to a 1953 Plymouth Suburban automobile, against the Fidelity and Casualty Company of New York, which on March 27, 1957, had issued a like policy specifically referring to a Mercury automobile, to Mrs. Russell Ward who resided with her husband Russell Ward. Later, by endorsement June 27, 1957, Mrs. Ward's policy was changed to specify a 1957 Buick automobile.
As a result of an accident on December 12, 1957, involving Russell Ward and his Plymouth, an injured passenger commenced action against Russell. Plaintiff investigated the accident and concluded it was obligated to pay substantial damages to the injured Robert Nelson. It so informed the defendant company, which denied coverage and refused to participate in the settlement with Nelson. This acton is to determine whether defendant's policy on Mrs. Ward's Buick covered the liability incurred in Mr. Ward's accident while driving his own Plymouth. The trial court found no defendant coverage, dismissed the cause with prejudice, and we have this appeal.
Two errors are assigned but, due to the view we take, only one need by considered here. Appellant contends the trial court erred as a matter of law in its interpretation of defendant's insurance policy by going beyond the plain and clear wording of the policy. We are not sure the court did find it necessary to go beyond the express intention of the parties as disclosed by the language used, but in considerating the matter fully it did state in its conclusions of law that 'the most that we can say for plaintiff's contention herein is that it has created an ambiguity.' In order to resolve that question the court then discussed the testimony of the parties, including a proffered statement of Mr. Ward, and referred to other circumstances surrounding the transaction. Appellant in its brief and argument insists the policy is clear and unambiguous, and we must agree. Thus in our determination of the parties' intent, only the instrument itself and the circumstances surrounding its execution will be considered.
In construing any contract it is our duty to ascertain and give effect to the intention of the parties. An insurance policy is a contract. We should not so construe it as to give a meaning that either extends or restricts the coverage beyond that actually provided. The contract should be construed as a whole, and the clear and unambiguous language must be given its plain meaning. These rules are so well established in all jurisdictions that they need no citation of authority. What, then, is the clear and plain meaning of this contract or policy?
While the family automobile policy has been in use for a number of years, there are relatively few court decisions construing the extent of its coverage and liability. See Neb.L. Review, May, 1958, Vol. 37, No. 3, page 581. We must, therefore, carefully examine its terms and provisions to determine whether the policy issued to Mrs. Ward on her Buick was broad enough to include coverage of her husband's Plymouth automobile at the time it became involved in this accident. The policy name or purpose, of course, has little or no significance when we seek to determine the liability assumed by the covenants contained therein.
I. Appellant refers to the definitions in appellee's policy and contends coverage is found therein in 'owned automobile' and 'named insured'. They provide: "named insured' means the individual named in Item 1 of the declarations and also includes his spouse, if a resident of the same household'; and "owned automobile' means a private passenger or utility automobile or trailer owned by the named insured, and includes a temporary substitute automobile.' Thus appellant argues the 'owned automobile' in appellee's policy includes all cars owned by both Mr. and Mrs. Russell Ward on the effective date of the policy; that since Mr. Ward as her spouse qualifies as an insured, appellee became liable for the assumed obligation 'to pay on behalf of the insured all sums which the insured shall become legally obligated to pay * * *' because of bodily injury and property damage 'arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile * * *.'
If we were to stop right here, it would indeed appear that the policy was intended to cover all automobiles owned by the party named in Item 1 of the declaration and her spouse, if he was a resident of her household. But this is not conclusive. It is not the entire contract. Courts must take a disputed contract by its four corners and determine its meaning from all the language used. Randolph v. Fireman's Fund Ins. Co., Iowa, 124 N.W.2d 528, 529, and citations. While it is true the definitions referred to in this family policy are broad enough to allow coverage for all cars owned by the parties and their spouses, and may well apply after the policy's effective date, these definitions alone do not constitute this whole agreement. Here, as in the Randolph case, we find that there are other pertinent provisions, conditions and exclusions, other expressions, declarations and circumstances, which are as much a part of the policy as the coverage itself. Also see Mallinger v. State Farm Mutual Automobile Ins. Co., 253 Iowa 222, 229, 111 N.W.2d 647, 651; 12 Am.Jur., Contracts, § 256, pp. 799, 800.
The policy in Item 3 of the declaration shows coverage is possible for six classifications of liability, and a space is provided to show the amount of coverage and the premium charged for each under columns headed 'Car No. 1' and 'Car No. 2' and 'Total'. This policy shows defendant was charged a premium for liability assumed only on 'Car No. 1.' No Figures appear in the 'Car No. 2' column. None appear in the 'Total' column.
Next, in Item 4 it is stated: 'The total number of Private passenger and utility automobiles owned on the effective date of this policy by the named insured does not exceed one, unless otherwise stated herein:' followed by the typed-in words 'No exceptions'. (Emphasis supplied.) The plain meaning of this statement is that only one automobile is to be covered by this policy as of that date, certainly not two or more, and it is difficult to see how it could be contended otherwise by either party. No reasonable person would expect one small premium as appears here was intended to cover all other cars owned by the insured, which term may include a spouse.
In Item 5 of the declarations we find the 1957 Buick listed as 'Car No. 1' and no other automobile is listed. Since these restrictive designations are clearly spelled out, it must be concluded the coverage intended at that time did not exceed one automobile, and that was the Buick owned by the designated insured, Mrs. Russell Ward.
II. Appellant contends there was a waiver of the policy provisions disclosed in the declarations, for it appears the appellee's agent knew of Mr. Ward's automobile. It argues knowledge by the agent is knowledge by the principal and that somehow this knowledge changed the terms of the policy and its coverage. There is no merit to the contention. Waiver or estoppel was not pleaded, and since we have concluded the policy as written expressed the true intention of the parties as to coverage, we fail to see how knowledge of the agent, or even of the principal, that other automobiles were owned by the insured would alter or extend this...
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